Are You Focusing On The Right Stuff?

Do you feel like you’re wasting your efforts and not getting the maximum from the things you do to grow your business? Are you unsure of where to place your focus for the very best results?

If so, you’re not alone and the good news is that there is a simple rule of thumb to maximize the potential of everything you do, in life and in your business.

What is this rule of thumb?

It’s called the Pareto Principle and it will change the way you run your business forever.

In This Lesson You’ll Learn: What the Pareto Principle is and six ways you can apply it to your business to get the most out of all your activities.

The Pareto Principle, or “80/20 Rule” as it is commonly known today, is a powerful tool for growing your business. The 80/20 Rule means that in any endeavor, the few (20 percent) are vital and the many (80 percent) are much less important.

For example, if you can determine which 20% of your time produces 80% of your results, you can spend more time on those activities and less time on others.

The value of the Pareto Principle for you is that it is a reminder to focus on the 20% that matters. Of the things you do during your day, only 20% really matters. That 20% produces 80% percent of your results.

Identify and focus on those things and you and your business will perform much better.

Do you know the 20% of your business that generates 80% of the results?

When you apply the 80/20 rule to assess your profitability, the benefits can be huge.

80/20 analysis allows you to make fact-based decisions instead of emotional ones and sets the stage for much better results.

Removing underperforming customers or products also simplifies operations and lets you focus on your strengths, which makes your business easier to manage and grow.

In fact, the 80/20 rule gives you easy access to dramatic improvements in profitability and efficiency by focusing on the most effective areas in your business.

Eliminate, ignore, automate or delegate the rest.

Let’s take a look at several ways you can apply the Pareto Principle to your business and tap into your true potential.

6 Ways To Apply The 80/20 Rule To Your Business

Customers – Customers are what keep your business going, but they aren’t all created equal. Not even close. According to the Pareto Principle, 20% of your customers generate 80% or more of your total revenue and profit. While all of your customers should enjoy excellent customer service, you should spend 80% of your attention giving the 20% of your best customers an even better experience.

Products – Much like your customers, 20% of your products are generating 80% of your revenue. The majority of your products and services are underperforming, or worse, not selling at all, and are great candidates for eliminating from your inventory. Complete an audit of your products to identify your best performers and focus more attention selling those products.

Employees – The 80/20 Rule is also true of your employees and other staff members. The top 20% of your employees are doing more work, selling more products, impressing more customers and creating more valuable assets for your business. Identify your best employees, find out what they are doing better than the others and then train those behaviors into the rest of your staff.

Time – The way you spend your time dictates your success. The key is learning what time is most productive and how to spend more of your time in that way. Be aware of how you spend your time and eliminate the busy work from your day-to-day activities.

SEO/Content – An overview of your website analytics will show you the Pareto Principle in action. Approximately 20% of the pages on your website generate 80% of your total traffic, and the same is true about your content strategy. Before writing new content, make sure it’s congruent with the other pages on your site that draw the most traffic.

Marketing Activities – Putting all your eggs in one basket is a fatal mistake in marketing, but so is spreading yourself too thin. Instead of relying on display advertising alone, add new marketing tactics into your strategy and test them for results. Once you have enough data, eliminate those activities that aren’t in the top 20%.

The Pareto Principle is a simple phenomenon that gives you the power to shift your focus to the areas that will have the most profound impact on your end goals and yield the greatest results. It is particularly useful for small businesses because it lets you identify the aspects of your business that are not performing to their full potential so you can either eliminate or improve upon them.

Use the Pareto Principle to accurately predict which activities within your business will best contribute to the overall success of your business and optimize the rest.

Do you know which of your activities are best contributing to your small business success?

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Spring Into Action: Go through the short list above and see if you can identify the best performers from each category. This should take approximately 60 minutes.